Liberal Canada – Mandate – March

2017By: Paul Young, CPA, CGA

March 31, 2017

Agenda• Family Tax Benefit• Middle Class• Honesty and Integrity• Modest deficits• Marijuana legalization• Infrastructure funding• Foreign Aid • Help for Seniors• CPP Enhancement• Working relations with the Provinces• GDP• Employment

Key Planks

Income Bracket / $45,282

• Who makes under $45,282?• Accommodation and food Services• Healthcare/social services• Other services sectors• Part-time jobs

Income Tax Bracket ($45,282 – $90,563)

• Majority of the Canadians• Goods Producing• Service Sector

Liberal Tax cut

Liberal / Justin Trudeau - Tax Savings / Example

• Elimination of tax credits means more taxes for the government

• EI and CPP are payroll taxes as such reduced your after tax income

• Carbon Taxes bump up the price of consumer goods and Utility costs

• Liberals tax cut saved money, but that money will be lost through higher payroll taxes, carbon tax and the elimination of tax credits

People making under 45,282

• No Tax cut• Hikes to EI and CPP are planned• Elimination of the Transit tax credit or about $800 savings

per year gone in 2017

Elimination of Tax Loopholes

Comments:• Elimination of the boutique and educational tax credits -

http://www.huffingtonpost.ca/cleo-hamel/federal-budget-child-benefits_b_9558180.html

• TFSA moved back to 5,000 from 10,000 - http://www.slideshare.net/paulyoungcga/pensions-for-canada-analysis-june-17-2016

• Elimination of principal residency for property held in trust - http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa12-eng.html (Based on residency status)

• Crackdown on evasion - http://news.gc.ca/web/article-en.do?nid=1049689

Family Tax Benefit

Source: http://www.cbc.ca/news/politics/calculator-canada-child-benefit-1.3504399

Issues:• Where is the incentive to expand

beyond 30,000 income• Latest Retail Sales for August 2016

showed many people were using the family tax benefit to pay down debt or for savings Source: http://www.slideshare.net/paulyoungcga/retail-sales-canada-august-2016

• What about the impact of other government policies?• CPP hikes• Carbon Tax/Pricing• Hydro Rates

Poverty Levels / Canada • Family Tax Benefit will reduced poverty levels

• How?• Income

• Wages have become stagnated - http://www.slideshare.net/paulyoungcga/wages-and-employment-canada-july-2016 • Part-Time jobs are growing faster than full-time jobs • Good producing sector continues to bleed jobs

• Source: http://www.slideshare.net/paulyoungcga/government-policies-labour-market-canada-67545343

• Household spending • Sheltering and Food account for over 41% of the household spending -

http://www.statcan.gc.ca/daily-quotidien/160212/dq160212a-eng.htm

Middle Class

Key Comment:• Treasury to be drained by $1.4B – Source -

http://www.cbc.ca/news/politics/liberal-tax-drain-100-million-1.3413516 • Taxing the richest -

http://www.cbc.ca/news/canada/new-brunswick/higher-taxes-on-rich-may-miss-revenue-targets-experts-say-1.3031842 or https://www.youtube.com/watch?v=pICUvNi95AY

• – Canada is still one of the best countries in the world - http://news.nationalpost.com/news/canada/canada-named-the-country-with-the-best-reputation-by-global-survey-again or https://ca.news.yahoo.com/blogs/dailybrew/canada-tops-the-world-as-most-reputable-country-021908756.html or http://www.slideshare.net/paulyoungcga/middle-class-and-quality-of-life-canada

Honest and Integrity with Financial Numbers

• Fundraising on the public dime - http://www.therebel.media/innovations_minister_s_funding_announcements_follow_liberal_fundraisers

• Limo rides - https://www.thestar.com/news/canada/2016/08/18/limo-company-used-by-health-minister-for-1700-ride-offers-refund-to-taxpayers.html

• Moving Expenses - https://www.thestar.com/news/canada/2016/09/23/liberals-try-to-turn-tables-say-harpers-tories-paid-out-325k-in-relocation-expenses.html

• Climate Change - http://www.theglobeandmail.com/news/politics/canada-commits-265-billion-to-climate-change-funding/article27507453/

• Trudeau and Wynne campaigning - http://ipolitics.ca/2016/02/14/trudeau-and-wynne-may-be-getting-too-cozy-for-their-own-good/

• Trudeau and Nanny - http://www.cbc.ca/news/politics/trudeau-nannies-employment-1.3620702

• MP Renovation Cost - http://www.cbc.ca/news/politics/sohi-infrastructure-minister-office-renovations-debate-1.3634811

Modest Deficits

Comments:• The country is on track to run a deficit of C$34 billion ($25.7 billion) in the

current fiscal year, almost C$5 billion more than forecast in the government’s March budget, the report calculated. Over the next five years, Canadian deficits are tracking C$16 billion more than forecast. Source: http://www.bloomberg.com/news/articles/2016-10-13/td-expects-canada-to-run-bigger-deficits-than-trudeau-budgeted

Marijuana Legalization

Comments:• Enforcement issues -

http://www.theglobeandmail.com/news/national/canadian-cities-challenged-by-ottawas-pot-plan-vancouver-mayor/article32204568/

• Violations of international treaties - http://www.cbc.ca/news/politics/marijuana-legalization-pot-anti-drug-treaties-1.3780661

Infrastructure Funding

Provincial dilly-dallying over eligibility and fine-print details has held up money for several provinces, including Ontario, Alberta and Nova Scotia Source: http://www.canadianmanufacturing.com/regulation/billions-dollars-infrastructure-spending-yet-start-flowing-173930/

Foreign Aid

Comments: • Expectations were low, but the federal budget released on March 22 provides little

concrete encouragement in the area of international development. In a section ambitiously titled “Restoring and Renewing International Assistance,” the government commits to increasing the International Assistance Envelope (IAE) by $256 million over two years – mere peanuts in relation to its other initiatives.

• The Harper government’s IAE reached $5 billion six years ago in 2010–11 and the Trudeau government does not plan to even match that level until next year. If we take into account inflation, the Liberals are further still from the modest goal of “restoring” foreign aid levels, which the Conservatives slashed in recent years. - Source: http://www.cips-cepi.ca/2016/03/24/budget-2016-postponing-decisions-on-canadas-foreign-aid/

• Foreign Aid oversight - http://www.slideshare.net/paulyoungcga/why-does-foreign-aid-fail-to-help-poor-countries-59777482

Help For Seniors

• GIS improvements or $947/year (Targeted low income seniors) - http://www.benefitscanada.com/news/budget-2016-changes-to-oas-and-gis-benefits-78787• Issue hurting seniors

• Hydro costs hurting seniors• Proposed carbon taxation will eat into household spending• Drug/prescriptions• De-listing of OHIP Services

CPP Enhancement

• Contribution rate to go from 4.95% to 5.95 - https://www.sunlife.ca/Canada/GRS+matters/GRS+matters+articles/2016/Breaking+News/Consensus+reached+on+CPP+enhancement+good+bye+ORPP?vgnLocale=en_CA• Impact to business

• Financial burden to business which can make them less competitive to their peers elsewhere in the world - http://www.bnn.ca/cfib-calls-for-delay-on-final-agreement-of-cpp-changes-citing-need-for-more-analysis-1.521851

Working relations with the Provinces

• After nearly a decade of a prime minister notorious for public tussles with premiers who challenged his policies, Canada's provincial leaders reacted Tuesday to the electoral victory of a Liberal leader who has promised to work harmoniously to advance their interests.

• During his time as prime minister, outgoing Prime Minister Stephen Harper was not shy about aggressively engaging premiers who spoke out against his government and displayed an outward contempt for first ministers' meetings. http://www.cbc.ca/news/politics/justin-trudeau-s-majority-greeted-with-optimism-by-provincial-premiers-1.3280093

Issues facing the Premiers and lack of meeting with Prime Minister• Carbon taxation - http://www.producer.com/2016/10/carbon-tax-not-part-of-new-sask-climate-change-plan/ or

http://www.slideshare.net/paulyoungcga/climate-change-policies-cap-and-trade-emissions-carbon-tax-carbon-pricing-canada

• Healthcare accord - http://www.cbc.ca/news/politics/premiers-trudeau-health-care-1.3782875

GDP Growth

• Scotiabank RBC – March 28, 2017

Summary - Overall

Source – Stats Canada – March 10, 2017

Comment:• Public Sector grew employment by 65,000

Government spending not sustainable – Financial Post – June 28, 2016

Source – Stats Canada – March 10, 2017

Broken Promises

• http://globalnews.ca/news/3009595/justin-trudeau-campaign-promises-kept-broken/